The Chicago Housing Authority has torn down all of its high rises and says it's close to completing its plans to transform public housing. Now, city leaders are moving to the next part of their plan: using public housing funds not just to build homes for poor families, but stores where they could shop and work. Some residents, however, say the city is breaking a promise to provide affordable housing.

Chicago Housing Authority CEO Charles Woodyard envisions neighborhoods in some of the city's poorer areas bustling with a mix of poor and middle-class residents, grocery stores and other shops. Throughout the city, he says, areas that thrive are full of mixed-income development. "I see huge amounts of commercial, retail everywhere, a lot of shopping," he says.

One group of public housing residents says that would be fine if none of them are driven out. Recently, they gathered outside the Cabrini-Green row houses — not far from Chicago's downtown skyscrapers — to announce that they are suing the housing authority. The last of Cabrini's high rises were demolished two years ago, and there are plenty of mixed-income developments nearby. Carole Steel has lived most of her life in Cabrini. She doesn't think much of the housing authority's new phase, the so-called Plan Forward.

"To me it's about a land grab," Steel says.

Only about a third of the 600 row houses are rehabbed. The rest sit vacant and shuttered behind a chain-link fence. The Chicago Housing Authority (CHA) had promised that all public housing residents could return, but many are still living in temporary housing and want to come back to their neighborhood.

"We have all the expressways right at our fingertips, all the 'L' stops right at our fingertips, and we got a multitude of stores. So this is the great opportunity area, so why try to chase us out of this area?" Steel says.

The vacant row houses sit at the heart of a dispute over Chicago's massive public housing overhaul and the mission of public housing itself. Despite the promise to residents, there are questions about the future of the homes. A few years ago, the CHA announced that the row houses would become a mixed-income development. Now officials say there's been no final decision.

Woodyard agrees there is a dire need for affordable housing in Chicago. But he says the country has seen how urban neighborhoods made up solely of public housing work. And, he says, they just don't work.

"I think evidence and the research shows that that is not a model that allows families to move up and out of subsidized housing. It's not a model that proves to be conducive to public safety and being good neighbors to the surrounding community. It is not the model we want to pursue in Plan Forward," Woodyard says.

'A Housing Intervention'

Cabrini residents are suing the CHA in federal court. Attorney Elizabeth Rosenthal calls any plan to demolish the row houses illegal and says they all should be rehabbed so former residents can return to the racially diverse neighborhood.

"CHA failing to do that violates the Fair Housing Act, perpetuates segregation and discriminates against low-income and African-American families," Rosenthal says.

Chicago's years-long public housing experiment has been closely watched by agencies throughout the country and by researcher Susan Popkin with the Urban Institute. She and her team kept in touch with several CHA families who were relocated when their buildings were torn down.

"They live in better housing and safer neighborhoods. They feel better for the most part. They feel less scared. They feel less anxious. That's a success. This was basically a housing intervention," Popkin says.

But some goals went unmet. The CHA says it aims to transform lives, but many of the 38,000 families using vouchers to rent in the private market often ended up in other racially segregated and poor neighborhoods. And children in CHA families didn't see much improvement in their lives.

Those are problems the CHA says its new Plan Forward could change. It calls for the agency to acquire and rehab apartments and homes in different communities, to offer more social services to adults and children, and to use some CHA land for something other than housing to help provide jobs and other opportunities.

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RENEE MONTAGNE, HOST:

In Chicago, a decade-long experiment in public housing has seen notorious high-rises come down and thousands of tenants relocated into better accommodations. Now, city leaders want to use public funds not just to build homes for the poor but also stores where they could shop and work.

NPR's Cheryl Corley reports that an idea that some tenants and their advocates are fighting, saying it will be at the expense of affordable housing.

CHERYL CORLEY, BYLINE: The Chicago Housing Authority's CEO Charles Woodyard says when he drives through thriving parts of the city, he sees...

CHARLES WOODYARD: A lot of mixed income development. I see huge amounts of commercial, retail everywhere; a lot of shopping.

CORLEY: And that, Woodyard says, is what he wants to build on vacant land in some of the city's poorer areas. He envisions neighborhoods bustling with a mix of poor and middle-class residents, grocery stores and more. But one group of public housing residents says that would be fine if none of them are driven out.

(SOUNDBITE OF CONVERSATIONS)

CORLEY: It's a warm sunny day and tenants and advocates gather outside the Cabrini-Green row houses, not far from Chicago's downtown skyscrapers. The last of Cabrini's high rises were demolished two years ago and there are plenty of mixed-income developments nearby. Carole Steel has lived most of her life in Cabrini. She doesn't think much of the housing authority's new phase, the so-called Plan Forward.

CAROLE STEEL: To me it's about a land grab.

CORLEY: Only about a third of the 600 row houses are rehabbed. The rest sit vacant and shuttered behind a chain link fence. The Chicago Housing Authority, known as the CHA, had promised all public housing residents could return, but many are still living in temporary housing and want to come back to their neighborhood.

STEEL: We got all the expressways right at our fingertips, you know, all the L stops right at our fingertips and we got a multitude of stores. So, you know, this is the great opportunity area, so why try to chase us out this area?

CORLEY: The vacant row houses sit at the heart of a dispute over Chicago's massive public housing overhaul and the mission of public housing itself. Despite the promise to residents, there are questions about the future of the homes. A few years ago, the CHA announced the row houses would become a mixed-income development. Now, officials say there's been no final decision.

CEO Woodyard agrees there is a dire need for affordable housing in Chicago. But he says the country has seen how urban neighborhoods made up solely of public housing work. And he says they just don't work.

WOODYARD: I think evidence and the research shows that, that is not a model that allows families to move up and out of subsidized housing. It's not a model that proven to be conducive to public safety and being good neighbors to the surrounding community. It is not the model that we want to pursue in Plan Forward.

CORLEY: Cabrini residents are suing the CHA in federal court. Attorney Elizabeth Rosenthal calls any plan to demolish the row houses illegal. And says they all should be rehabbed, so former residents can return to the racially diverse neighborhood.

ELIZABETH ROSENTHAL: CHA failing to do that violates the Fair Housing Act, perpetuates segregation and discriminates against low-income and African-American families.

CORLEY: Chicago's years-long public housing experiment has been closely watched by agencies throughout the country and by researcher Susan Popkin, with the Urban Institute. She and her team kept in touch with several CHA families who were relocated when their buildings were torn down.

SUSAN POPKIN: And they're living in better housing and safer neighborhoods. They feel better, for the most part. They feel less scared. They feel less anxious. That's a success. This was basically a housing intervention.

CORLEY: But some goals went unmet. The CHA says it aims to transform lives. But many of the 38,000 families using vouchers to rent in the private market often ended up in other racially segregated and poor neighborhoods. And children in CHA families didn't see much improvement in their lives.

Those are problems the CHA says its new Plan Forward could change. It calls for the agency to acquire and rehab apartments and homes in different communities, to offer more social services to adults and children, and to use some CHA land for something other than housing to help provide jobs and other opportunities.